Welcome to Coffee Talk! In this episode, we speak with two leaders from one of the companies that help make our platform possible, and we’ll learn more about the work they’re doing to move the industry forward.

My guests are from none other than Bayer G4A. Bayer G4A was officially launched as “Grants4Apps” in Berlin in 2013, originally with the aim of funding healthcare mobile apps. Now, 6 years later, this program has shortened its name to simply ‘G4A’, while also extending it’s global presence to more than 35 countries.

Bayer G4A is one of the most successful and highly regarded programs in the industry, and they’ve moved far beyond simply funding the creation of apps. They provide a powerful network of support for early stage businesses with a combination of funding, mentorship, and, perhaps most significantly, they provide opportunities to create commercial partnerships.

I’ve invited two of the leaders of the G4A program to give us an update about their work and how the organization is working internally and externally to create opportunities for early stage businesses.

With me is Eugene Borukhovich, he’s the Global Head of Digital Health Incubation & Innovation at Bayer, and Sophie Park, Chief of Strategy for the Bayer G4A Digital Health Partnerships.

Tune in as we discuss the new format of the G4A program, how it's helping startups succeed, and tips for fostering intrapreneurship and successful partnerships.

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Complete Transcript

Welcome back to Digital Health Today, the place to be to get the insights of leaders making the healthcare of tomorrow, available today. I’m your host, Dan Kendall and this is a Coffee Talk.

If you’ve never joined us for a Coffee Talk before, let me explain what this is all about. In our regular episodes, we bring you conversations with innovators and leaders who are making change happen in healthcare. We have an active and loyal community of listeners, like you, who are also working to make healthcare better for millions and billions of people around the world.

We’re able to share these stories and conversations because of the support we get from our sponsors – businesses and organizations that are passionate about sharing the experiences and ideas that help accelerate change and fuel new ways of working.

Today on this Coffee Talk, we’re going to speak with two leaders from one of these companies, and we’ll learn more about the work they’re doing to move the industry forward.

My guests are from none other than Bayer G4A. Bayer G4A was officially launched under the name “Grants4Apps” in Berlin in 2013, and it’s original aim was funding healthcare mobile apps.

Now, 6 years later, this program has shortened its name to simply ‘G4A’, while also extending its global presence to more than 35 countries. Bayer G4A is one of the most successful and highly regarded programs in the industry, and they’ve moved far beyond simply funding the creation of apps. They provide a powerful network of support for early stage businesses with a combination of funding, mentorship, and, perhaps most significantly, they provide opportunities to create commercial partnerships.

Bayer has also been a sponsor of Digital Health Today since 2017, and I’m really grateful for their support as we’ve gone to work to support the growth and success of the industry. Plus, they are a really great group of people – you can find them at various events around the world and they really embody the ‘work hard, play hard’ spirit.

I should, of course, clarify for our very international audience that the word ‘Bayer’ is one of the many words that are spoken differently in different parts of the world. When I say ‘Bayer’, I mean the German firm that is known according to their, and the correct, pronunciation as BUYer. I always do try to pronounce words the way they are intended to be spoken in their native language, so in this case BUYer is the correct way, but I also grew up in the US referring to this company as Bayer….so sometimes old habits are hard to break. You’ll hear our guests today also using both pronunciations, BAYer and BUYer, so just wanted to sign post that up front.

I’ve invited two of the leaders of the G4A program to give us an update about their work and how the organization is working internally and externally to create opportunities for early stage businesses.

With me is Eugene Borukhovich, he’s the Global Head of Digital Health Incubation & Innovation at Bayer, and Sophie Park, Chief of Strategy for the Bayer G4A Digital Health Partnerships.

Eugene, Sophie, welcome to Digital Health Today!

Eugene BorukhovichThank you, Dan. Always a pleasure.

Sophie ParkThanks, Dan. really delighted to be here.

Dan KendallGreat to be with you both – first of all, I want to get an update on the Bayer G4A program and talk about some of the changes and opportunities that you’ve created for this year. This is a program that’s been going since 2013, and last year, 2018, there were three different programs you launched throughout the year. It seemed like for about 6 months of 2018 there were opportunities for businesses to apply to programs that were in place. I won’t describe each of them here, but each of the G4A branded programs last year, seemed to provide different opportunities for different kinds of businesses based on their commercial stage and their area of clinical or technical focus.

Now, all that’s changed this year, and there is one call for applications, which is open right now – applications can be made until May 31 by visiting G4A.health.

So tell me about the changes that you’ve put in place, and the benefits of what that means to the startups that are interested in participating.

Sophie ParkYou are absolutely right, I mean, we used to run three separate programs last year, three different application periods, and the biggest thing that’s changed this year is that we now have now essentially merged three different programs into one with two tracks: Growth and Advanced. So what that entails is, now as we are focusing more on our bigger vision, which is changing the experience of health, we've come to fully realize that, you know, healthcare does not separate itself from consumer health or pharma. Healthcare is healthcare at the end of the day. And we're now looking for these companies to partner with us, and what's great about it is that this year, we are actually guaranteeing some sort of collaboration or a commercial partnership or a project partnership with Bayer to these companies that actually come in through our program this year.

Eugene BorukhovichIndeed, and we actually kind of joke around that we run the team almost like a startup, and so it is important for us to continue pivoting. And of course, while there's never a ‘absolute’ guarantee, meaning the startups still have to go through that due diligence process with us, what we felt, and part of the reason for the change is that, you know, we had kind of grown organically over the years, and last year just in between the Berlin and USA programs, we had the early stage Accelerator, we had the Dealmaker, we had the Generator, there was a lot of confusion, and one of the things that we kind of heard loud and clear is that the world doesn't care how we at Bayer are setup. And so for us, it was important to kind of have one way in for the startups to simplify their life, and there to choose the Growth Track or the Advanced Track.

Dan KendallWow, so that’s really been streamlined down from three programs, and it’s consolidated into one program with two tracks – the Growth Track and the Advanced Track – now, I want to understand those a little bit better, let’s dive into a little bit more about the details of those programs so I understand what that means for startups and companies that may be interested in the G4A program. My impression is that the Growth Track is for companies with just little more than a minimum viable product, so how does a company decide whether they apply for the Growth Track or the Advanced Track?

Eugene BorukhovichYou know, this is a self selection process, in a sense. And we do have a bit of the definition, I mean, you should have an MVP, even for the Growth Track. And yes, there's more mentorship. But to give an example, last year three out of the six of our Accelerator [companies], so this is the younger stage companies, ended up with some kind of a commercial deal with Bayer.

On the Advanced Track, we’ve already seen some applications flowing in and this is you know, I’ve seen some late Series A even some Series B startups because we're we are looking to actually scale their relationships, with a hypothesis of a commercial and business model behind it.

Dan KendallOk, great, so I’m clear. So the Advanced Track is for companies that are a little bit more advanced with a product on the market and ready to scale, and Growth Track is for companies that have at least a minimum viable product.

Now, Eugene it sounds like your team has really done a lot to develop G4A to facilitate these commercial agreements, and Letters of Intent, and I’m sure there’s a lot more that happens behind the scenes to make this possible. I really love that you’ve created these opportunities for businesses, but there has to be some commercial imperative for Bayer, some commercial benefit. What’s the primary goal of the program and how do you align the corporate interests with those interests of scrappy startups?

Eugene BorukhovichFrom one perspective, the goal is to get an LOI [Letter of Intent] at the end of it, but behind it and how we shifted the whole timeline, and the depth of the due diligence that we do in what we call our ‘Identify Phase’, which is going to happen after the summer, we're actually really looking to get deep knowledge and due diligence into the companies themselves. But even more so and more important, on the inside of Bayer, instead of just signing the Letter of Intent, the goal is actually, very quickly, to convert them to commercial contracts. So a lot of that due diligence on the business model, commercial model, go-to-market model will be done during that time frame, actually, together with the set of startups that we pre-select for the final decisions for Growth or Advanced Track.

Dan KendallSo sounds like you have your work cut out for you and one thing that will make the whole process better and more productive to everyone involved is to really attract the best companies to apply, and give them the opportunity to really stand out right from the beginning – right from the point where they actually apply to be a part of G4A.

Eugene BorukhovichOne quick comment on that. We've actually extended the application process, meaning it is probably a lot more complex. We're asking some of the tough questions, including, you know, your real plans, you know, which countries you operate in? Where do you want to scale? Because again, we're serious about starting to scale these relationships. So it's important how it ties with that particular startup’s strategy, and so I think there's something like 65 questions all in all, of course, a lot of it is kind of the basic demographic, geographic [information] but, pay attention to what you put in for your team, for your go-to-market strategy, be upfront. So, we've made it a bit more complex, which is actually what's driving us now is not the number of applications this year, but it's really the quality of applications.

Dan KendallWell, I think that the fact that there is more work to do at the beginning will help companies self-select since not everyone is prepared to do the work – to make their own luck so to speak – by putting forward their efforts and making a great application. So that makes it better for the companies that know they have something to offer as well as something to gain from being a part of the program.

Speaking of which, I mentioned at the beginning that selected companies benefit from funding, mentorship and a potentially a commercial relationship with Bayer, so what can you tell me about the funding available for companies in the Growth or the Advanced tracks?

Sophie ParkThe Growth Track is a convertible note between €50k-100k [approx $56k-112k]. The Advanced Track is just project funding, no strings attached, €50-100,000 initial funding from us, and is also matched by the Bayer business.

Dan KendallAnd Sophie you also mentioned at the very beginning that some of these changes are being driven by your bigger vision at Bayer – which is on changing the experience of health. And aligned with that part of what G4A has done this year is you’ve identified some key challenge areas that you’re looking for partners to help you solve. Can you describe some of those?

Sophie ParkAbsolutely. So a lot of the information on our challenges can be found on G4A.health, but we are looking at a variety of challenges this year, which includes cardiovascular, radiology, pulmonology, and this year, we also even added a global health challenge in there as well to look at more emerging markets and high-growth areas.

Dan KendallIt’s great to hear that you’re looking for solutions that apply not just to western health systems and the business models that already exist there, but that you’re also looking for really innovative solutions that can help serve underserved populations and regions. How many companies will you select for the two different tracks, for the Growth and the Advanced tracks that will enter the program?

Eugene BorukhovichTo be honest, we're still kind of looking at this. We probably are not going to change anything significantly from the Growth Track perspective, which in the past, we've accepted, in the typical accelerator, between four to six [companies]. I think that will stay very similar.

On the Advanced Track, it all honestly depends on, you know, we do have 17 challenges out there. If we can find one company to partner with for each one, absolutely fantastic, and you know, up to 15.

Dan KendallThis is a global program that’s open to companies around the world – Do the companies you select need to relocate to Berlin to participate?

Sophie ParkSo for the Growth Track we do offer, but it is not required, that they come to Berlin and spend some time here for about 90 days. We do offer that workspace here. For the Advanced Track, we understand that these companies probably have more clients and need to be in different areas at all times, so they're not necessarily required to stay here. But obviously, when there are bigger project meetings, and such, we do require them to be here.

Dan KendallThat’s really good to know because that can be a big benefit for organizations to be co-located, but it also seems that you recognize that it doesn’t always work for everyone at every stage. Sometimes there are professional or personal situations that don’t really facilitate a three-month relocation to a new country or even a new continent. So it’s good that you’re creating those opportunities to connect these leaders and organizations with the leaders and resources inside Bayer.

I imagine there are a lot of other improvements you’ve done to make this better – so for other leaders that are working to help foster innovation and partnerships, can you give any other insights or lessons that you’ve learned that have made G4A most effective?

Eugene BorukhovichYeah, you know, it's interesting, because we kind of define at least our partnerships is the bridge between the innovators and Bayer, and if you think about those, there’s the landmass on both sides, and so I would almost say it's equivalent important to listen to the market. And for example, we've seen, I mean, the whole market is maturing.

Just to give you one little concrete example, even how we shifted the whole decision-making process: because we want to scale, we timed it to just around the budget-setting times. So as we select some of those startups, then our P&L owners can actually budget for scaling the year after. So you can kind of kick off the pilot in, let's say, September, October, November, and then also already plan for that scaling, because we've helped identify a right hypothesis for that commercial model.

So it is completely a combination of what the startups wanted to see from a large organization like ourselves, which is simplicity in the process, and concrete and transparent feedback. But also on the inside is, you know, how do we kind of fit into our (a) the budgeting cycle, (b) the strategic imperatives, (c) from the resources perspective, and you know, the list goes on?

Dan KendallAnd it’s clearly working, this is a completely new sort of model that you’re putting in place and it’s having a real impact for startups, but it’s also having a real impact on Bayer’s business and that’s why you’re continuing to put so much effort and resource into developing this. What’re the latest figures about how many companies have gone through the G4A program?

Eugene BorukhovichBy the way, one key thing that I didn't mention, we have the G4A family around the world, you know, we have the accelerators/incubators running in Shanghai, Moscow, Istanbul, Tokyo, Seoul, and so when we look at our portfolio, and how we define that portfolio, this is not a typical, you know, venture fund portfolio, we have about 150 companies that either a) went through our accelerator somewhere in the world, or b) got a Letter of Intent, or c) got a Letter of Intent and a commercial deal. And it's about 150 companies around the world that have gone through that, with roughly 20% conversion ratio to actual commercial models.

Dan KendallAnd I imagine that as Bayer, as a business, has embraced the G4A program, that the success ratios are continuing to improve year-on-year. And also, frankly the quality of the startups is also improving as the industry becomes more focused and competitive and more developed. So can you share any information about the trends that you’re seeing year-on-year on this program internally?

Eugene BorukhovichYeah, so we launched the commercial program in 2017. So the first year in ‘17, we had about over 30 challenges, I think close to 40 challenges listed. And we selected 40 companies to fly to Berlin, had these meetings and the pitch sessions with all different experts around from, you know, legal, from procurement, from technology organization. Out of the 40, we signed 12 Letters of Intent, and there was only about 10-15% conversion to actual commercial contract.

Last year (2018), we actually focused more, and we only selected 12 companies. Out of those 12, nine got Letters of Intent, and out of those nine (companies) we’re at about 40% conversion ratio ratio to actual commercial contracts.

And the interesting part, what we did last year, you know startups get to pitch to large corporates all the time; once the selection process of those nine were done, we as a team reversed that process on the inside, whether it's therapeutic area teams, or I’ll put it simply, ‘challenge owners’ had to pitch back to us as a team, plus a few people from the rest of the organization like medical affairs, etc. And on top of that, under the non-disclosure, we invited a venture capitalist there in Berlin, and so those therapeutic areas and the challenge owner needed to pitch back to us for some initial seed funding for the pilot. And what happened, we awarded, I think, three or four of those I’ll call them ‘internal grants’ to seed it. And then a lot of the therapeutic area heads kind of put money in, and so one startup ended up with a pretty significant sized contract that of course, I can’t disclose here. But that's kind of us sort of reversing and driving that mentality on the inside [of Bayer] as well.

Dan KendallBrilliant – thanks for sharing those numbers. I can’t wait to see which companies are selected to participate this year. And one thing for sure is that you can’t participate if you don’t apply – so get online at G4A.health and submit your applications. The deadline to apply is May 31, 2019, and then you’ll begin your review and invite companies to participate. When does the actual program run?

Sophie ParkStarts in October, ends at the end of December!

Dan KendallGreat – so get your applications in and actually, while I’ve got you guys on the line, do you have any advice to companies that can help them stand out and be invited to be a finalist?

Eugene BorukhovichSo one, do your homework. We're very, very transparent on the existing challenges, so there's about 17 of them out there across our therapeutic areas and categories. We as a team, also put in some ‘bolder ones’ and I put that in quotes. So you'll see, you know, digital therapeutics, you'll see neurotech, as we did from last year, we're adding things like voice tech, and this is where you also, as a startup, need to pay attention to ‘where does Bayer operate?’, right. And we've gotten quite a lot of different submissions in the past where there's really no applicability. And of course, from one perspective, we shouldn't waste each other’s time. From the other perspective, we did open, I'll call it a ‘fun bucket’, which is ‘other’, but in parentheses is ‘we don't know what we don't know.’ So make a compelling case, you know, persistence, persistence, persistence.

Dan KendallExcellent advice! Listen, Eugene, Sophie, I just want to say thanks for all the work that you and your colleagues are doing and continue to do to drive this program deeper into the industry and helping companies connect into the Bayer organization. Come back and keep us posted on how things progress in G4A and the startups you select.

Eugene BorukhovichLooking forward!

Sophie ParkThanks Dan!

Dan KendallSo how about listeners? Think you have what it takes?

Applications are open until May 31, 2019 and if you miss it – well, really, the key is to not miss the deadline! Stay up late, cancel your night out, tell your friends you’ll watch Game of Thrones another night, and sit down at G4A.health and get your application in. If you’re listening to this after May 31, 2019, then go online anyway and sign up to be notified when the next set of applications open up.

You can find links to everything we discussed and a complete transcript of this podcast, by visiting our website. Once you’ve applied, drop me a line to let me know, I’d love to hear about your progress.

Thanks for tuning in and thanks to Bayer for their sponsorship of the Digital Health Today platform. I look forward to connecting with you on the next episode, and until next time, keep on innovating!

Dan Kendall

ABOUT THE HOST

As an engineer and business leader, I've worked to develop, launch and scale innovative products and solutions that impact health and wellness. As an entrepreneur, I know firsthand what it takes to start a business, build a team, and compete in the global marketplace.

On Digital Health Today, I leverage my experiences to help great leaders and innovators tell their stories and connect to users, investors and other stakeholders.

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